British Foreign Secretary William Hague, right, talks with Luxembourg's Foreign Minister Jean Asselborn during the EU foreign ministers meeting at the European Council building in Brussels, Monday, July 22, 2013.

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BEIRUT, Lebanon — The European Union agreed on Monday to blacklist the “military wing” of Lebanon’s militant Shiite organization Hezbollah in response to the group’s alleged activities in Europe.

The unanimous decision ends months of wrangling between the 28 EU member states over whether or not to slap Hezbollah on its list of terrorist organizations. The long-standing debate hardened after a deadly suicide bomb attack in Bulgaria last year that was pinned on the group, while Hezbollah’s military intervention in Syria’s war eroded the lingering hesitation of some European countries.

However, the blacklisting only applies to Hezbollah’s “military wing,” a distinction that allows officials and diplomats from European countries to continue meeting with Hezbollah’s “political” leaders, such as parliamentarians.

Hezbollah did not issue any immediate response, but the EU decision is not expected to have much impact on an organization that is the most powerful military and political force in Lebanon and is not believed to have much in the way of identifiable assets in Europe.

Hezbollah’s Al-Manar television station said the EU decision would have little effect and quoted a recent speech by the party’s leader, Sheikh Hassan Nasrallah, saying “If Europe sees that Hezbollah is so significant to change regional equations then we are more than proud of this. As for their terror list, I have one thing to say to them: you can soak your list and drink its water…”

Hezbollah faces far greater challenges given steadily worsening Shiite-Sunni tensions in Lebanon and across the region inflamed by its deep involvement in Syria.

“Hezbollah has major worries, major battles, [and is] facing a major existential threat and [the EU blacklisting] is not one of them,” says Paul Salem, director of the Carnegie Endowment’s Middle East Center in Beirut.

Backlash?

Britain has led the effort to blacklist Hezbollah and received support from France and Germany. The decision required unanimity among all 28 member states, but some EU countries were reluctant to fully proscribe Hezbollah. Ireland and Austria – both of which have troops serving with a United Nations peacekeeping force in south Lebanon – warned of the potential backlash against EU interests and the risk of causing further instability in Lebanon, a country already reeling from the shock waves of the two-year war in neighboring Syria.

William Hague, the British foreign secretary, told reporters ahead of the EU meeting that the impact on Lebanon would be minimal.

“We don’t believe that this action would destabilize Lebanon or have serious adverse consequences. It is important for us to show that we are united and strong in the face of terrorism,” Mr. Hague said.

Only the US, Canada, the Netherlands, and Israel have fully proscribed Hezbollah. Other countries, such as Britain and Australia, have opted for partial measures by blacklisting either its “military wing” or its “terrorist wing.”

The Lebanese government, which includes members of Hezbollah, last week appealed to the EU not to proscribe the party, noting that it was an important and influential player in Lebanese politics with a wide base of popular support.

“[Hezbollah] is a fundamental constituent of this country and cannot be distanced from its government due to Lebanon’s precarious situation… How will Europe then deal with the Lebanese government in the future? How will they differentiate between the party’s political and military wings?” Adnan Mansour, Lebanon’s caretaker foreign minister, said in remarks published by the London-based Al-Hayat newspaper on Monday.

The EU move should have no impact on its dealings with Beirut. Even though Washington classifies Hezbollah as a terrorist organization, US diplomats regularly meet with members of the Lebanese government, just not those ministers who belong to Hezbollah.

Hezbollah has made little comment on the threat of EU sanctions. But Sheikh Nabil Qawk, a senior Hezbollah official, said on Sunday that the party would not be swayed by the EU’s “threats and intimidation.”

“The resistance [Hezbollah] is greater than being isolated and stronger than being humiliated,” he said during a funeral ceremony in south Lebanon.

The tipping point

The move to proscribe Hezbollah intensified in the wake of a July 2012 suicide bombing that killed five Israeli tourists and a driver of a bus in the Bulgarian town of Burgas. In February, Bulgarian Interior Minister Tsvetan Tsvetanov said there was “well-grounded” evidence that Hezbollah was behind the bomb attack. Last week, the Bulgarian government said it had received additional evidence further implicating Hezbollah, an announcement that appeared to be timed to the looming EU vote.

In March, a court in Cyprus convicted a dual Lebanese-Swedish man who admitted being a member of Hezbollah on charges of planning bomb attacks against Israeli tourists on the Mediterranean island.

However, the tipping point that led to the EU decision to proscribe Hezbollah’s “military wing” appears to have been the party’s unprecedented intervention in Syria, where an estimated several thousand of the group’s fighters are battling Syrian rebels to preserve the regime of Syrian President Bashar al-Assad.

Hezbollah bills itself as a Lebanese resistance force that drove Israeli occupation forces out of south Lebanon in 2000, fought them to a standstill in a month-long war in 2006, and today protects Lebanon against any future Israeli aggression. Sheikh Nasrallah admitted in May that his cadres were fighting in Syria, but said it was a necessary battle to prevent extremist Sunnis from destabilizing Syria and Lebanon.

Hezbollah’s overt combat role in Syria, which has led to scores of casualties within its ranks, has caused deep anger from Sunnis in Lebanon and elsewhere in the region who support the overwhelmingly Sunni opposition in Syria. It has also tarnished Hezbollah’s reputation as a “resistance” movement struggling against occupation and a champion of the oppressed.

“There had been an acceptance of their role as a Lebanese resistance but to be a regional army fighting regional wars is something that many European capitals no longer accepted,” says Mr. Salem.

Tangled web

Nevertheless, implementing the new EU policy on Hezbollah is fraught with practical difficulties. Although Hezbollah traditionally receives financing from its patron Iran, it has built over the decades an extensive fund-raising network that spans the globe and covers both legitimate and illicit commercial activities. The network is believed to generate tens of millions of dollars each year – the exact figure is unknown.

Much of that funding, however, is spent on Hezbollah’s extensive social welfare apparatus, which includes hospitals, clinics, and schools, as well as charitable foundations that look after the families of dead fighters, provide cheap housing, agricultural assistance to farmers, and distribute utilities such as water and electricity.

Because it proscribed only the “military wing” of Hezbollah, the EU will have to determine into which category – “military” or “social welfare-political” – any assets held by Hezbollah in the EU falls. Furthermore, the EU designation technically prevents Hezbollah military personnel from traveling through EU member states.

How that restriction will operate in practice is unclear. The EU will likely compose a list of those Hezbollah members who can be identified as “military” rather than “political” cadres, but any such list is likely to be very short. Hezbollah is a secretive organization and does not reveal the identity of its military and security personnel.